Gulf oil spill prosecutors are picking up the pace

Oil spill inquiry starting to pick up paceCharges called likely by year's end against BP

TOM FOWLER, HOUSTON CHRONICLE |
April 21, 2011

In the month since a prosecutor with experience in New York mob cases took over as head of the criminal probe into last year's Gulf oil spill, federal investigators have picked up the pace of interviews with individuals involved in the accident, lawyers familiar with the case say.

Charges are likely by the end of the year against BP — which owned the well that blew out, killing 11 workers and triggering the spill - and possibly other companies and individuals, said these sources, who spoke on condition of anonymity because of the sensitivity of the ongoing investigation.

The Justice Department's official explanation is that it wanted to "avoid duplication of effort" by coordinating the many facets of the investigation under one umbrella task force.

Attorneys and agents from a number of federal agencies have been working together out of an investigation headquarters at 400 Poydras in downtown New Orleans, but the new leadership is supposed to make that effort run more smoothly.

Criminal division

Sources familiar with the case say another motivation for the move was a preference that prosecution be overseen by Buretta's boss, criminal division head Lanny Breuer, than by Ignacia Moreno, who heads the environmental division and supervises Stewart.

That also could signal greater focus on non- environmental elements of the investigation, including possible negligence in the deaths of 11 workers on the Deepwater Horizon drilling rig and whether BP officials deliberately understated the magnitude of the spill in an effort to limit the impact on its stock price.

Spill estimates

In the weeks following the blowout of BP's Macondo well and sinking of the Deepwater Horizon drilling rig, BP said oil was spilling into the Gulf of Mexico at around 5,000 barrels per day. The government adopted BP's figure as the official estimate, even as other experts said data suggested the number was too low.

Eventually the spill rate estimate rose to about 60,000 barrels per day.

Lower burden of proof

Sources say prosecutors are also investigating whether they can bringcharges of seaman's manslaughter - a variation on manslaughter laws used for cases involving deaths on U.S. rivers and coastal waters. It requires a lower burden of proof for conviction than other manslaughter statutes but hasn't been used before in a case involving an incident so far out to sea.

Whatever the full scope of the investigation, it's expected the case will lead to billions of dollars in criminal fines under the Clean Water Act and Migratory Birds Act.

"This is a message case, a chance to create clear deterrents to such events in the future," said Sam Buell, a law professor at Duke University and a former criminal prosecutor who worked on organized crime cases andthe Enron criminal cases.

David Uhlmann, a former head of the Justice Department's environmental crimes section who now teaches law at the University of Michigan, says the change in leadership probably won't change the government's approach - to push aggressively with skilled litigators. But it creates some concerns.

Career attorneys

First, the career attorneys in the environment and natural resources division may see the move as a slap in the face.

"The environmental crimes section is the largest and most experienced environmental crimes prosecution office in the world. There should not be any question inside or outside the department about whether the environmental crimes section was up to the task of handling such a significant case," Uhlmann said.

The new criminal division attorneys at the head of the team might choose to focus more on the kind of charges they handle regularly, such as those that might arise if investigators determined thatstock price considerations figured in BP's spill estimates.

The criminal division may also have a different view about whether to bring charges based on negligence - such as the Clean Water Act or seaman's manslaughter - since traditional fraud prosecutors are accustomed to charging under laws requiring a higher burden of proof.

'Cost of doing business?'

The criminal division also has a well-established track record of using deferred prosecution agreements to settle cases. That approach can bring in large fines while letting companies avoid criminal convictions and admissions of guilt.

But Duke University's Buell said the spill case may deviate from what he acknowledged are "somewhat institutionalized" deferred prosecution agreements in the fraud division.

The government would face a huge amount of criticism if it allowed BP to get off without some admission of guilt, Buell said.

"I can't see that happening," Buell said. "There's too much public interest, too many public values at stake. There are too many victims who want to see something that amounts to a conviction."

BP put money in a fund ahead of time in anticipation of huge settlement costs and fines, so monetary fines alone also might be less satisfying to aggrieved parties or the wider public.

"Short of bankruptcy, would the fine just end up being just another cost of doing business?" Buell said. "How do you get an additional message across? Prosecutors will be thinking of that."